Philip C. Cateora,
University of Colorado-Boulder John Graham,
University of California-Irvine
ISBN: 0073080063 Copyright year: 2007
Book Preface
At the start of the last millennium the Chinese were the preeminent international traders.
Although a truly global trading system would not evolve until some 500 years later,
Chinese silk was available in Europe.
At the start of the last century the British military, merchants, and manufacturers dominated
the seas and international commerce. Literally, the sun did not set on the British
Empire.
At the start of the last decade, Japan's economic successes had rendered the military
competition between the United States and the Soviet Union obsolete. Pundits circa
1990 predicted a Pacific Century, wherein trans-Pacific trade would surpass trans-Atlantic trade. Other Asian economies would follow the lead of Japan. No one then foresaw
the ascendancy and impact of the American-created information technology
revolution.
What surprises do the new decade, century, and millennium hold in store for all of
us? Halfway through the decade natural disasters and wars have hampered commerce
and human progress. The battle to balance economic growth and stewardship of the
environment continues. The globalization of markets has certainly accelerated through
almost universal acceptance of the democratic free enterprise model and new communication
technologies, including cell phones and the Internet. Which will prove the better,
Chinese gradualism or the Russian big-bang approach to economic and political reform?
Will the information technology boom of the previous decade be followed by a
demographics bust when American baby boomers try to retire in 2010? Or will NAFTA
and the young folks in Mexico provide a much-needed demographic balance? Ten years
out the debate about global warming should be settled -- more data and better science
will yield the answers. What unforeseen advances or disasters will the biological
sciences bring us? Will we conquer AIDS/HIV in Africa? Will weapons and warfare
become obsolete?
International marketing will play a key role in providing positive answers to all these
questions. We know that trade causes peace and prosperity by promoting creativity, mutual
understanding, and interdependence. Markets are burgeoning in emerging economies in
eastern Europe, the Commonwealth of Independent States, China, Indonesia, Korea, India,
Mexico, Chile, Brazil, and Argentina -- in short, globally. These emerging economies hold
the promise of huge markets in the future. In the more mature markets of the industrialized
world, opportunity and challenge also abound as consumers' tastes become more sophisticated
and complex and as increases in purchasing power provide consumers with new
means of satisfying new demands.
Opportunities in today's global markets are on a par with the global economic expansion
that existed after World War II. Today, however, the competitive environment within which
these opportunities exist is vastly different from that earlier period when United States
multinationals dominated world markets. From the late 1940s through the 1960s, multinational
corporations (MNCs) from the United States had little competition; today, companies
from almost all the world's nations vie for global markets.
There is no better illustration of the changes that have occurred in the competition for
global markets in the last quarter century than that experienced by General Electric
Lighting (GEL). GEL, begun in 1887, dominated the U.S. lighting market until traditional
rival Westinghouse sold its lamp operations to Philips Electronics of Holland in
1983. "Suddenly," reflected GEL's chief, "we have bigger, stronger competition. They're
coming to our market, but we're not in theirs. So we're on the defensive." Not long after,
GEL acquired Tungsram, a Hungarian lighting company, and Thorn EMI in Britain,
and then moved into Asia via a joint venture with Hitachi. As recently as 1988, GE
Lighting got less than 20 percent of its sales from outside the United States; in 2000,
more than half came from abroad. What happened at GE Lighting has occurred over and
over again to MNCs in the United States, Europe, and Asia. The companies that succeed
in the 21st century will be those capable of adapting to constant change and adjusting to
new challenges.
The economic, political, and social changes that have occurred over the last decade have
dramatically altered the landscape of global business. Consider the present and future impact
of the following:
The ever-present threat of global terrorism as represented by the September 11,
2001, attacks
Major armed conflicts in sub-Saharan Africa and the Middle East
The looming global recession
The emerging markets in eastern Europe, Asia, and Latin America, where more than
75 percent of the growth in world trade over the next 20 years is expected to occur
The reunification of Hong Kong, Macau, and China, which finally puts all of Asia
under the control of Asians for the first time in over a century
The European Monetary Union and the successful switch from local-country currencies
to one monetary unit for Europe, the euro
The rapid move away from traditional distribution structures in Japan, Europe, and
many emerging markets
The growth of middle-income households the world over
The continued strengthening and creation of regional market groups such as the
European Union (EU), the North American Free Trade Area (NAFTA), the Central
American Free Trade Area (CAFTA), ASEAN Free Trade Area (AFTA), the Southern
Cone Free Trade Area (Mercosur), and the Asian-Pacific Economic Cooperation
(APEC)
The successful completion of the Uruguay Round of the General Agreement on Tariffs
and Trade (GATT) and the creation of the World Trade Organization (WTO), the
latter now including China and Taiwan
The restructuring, reorganizing, and refocusing of companies in telecommunications,
entertainment, and biotechnology, as well as in traditional smokestack industries
around the world
The continuing integration of the Internet and cell phones into all aspects of companies'
operations and consumers' lives
These are not simply news reports. These changes affect the practice of business worldwide,
and they mean that companies will have to constantly examine the way they do business
and remain flexible enough to react rapidly to changing global trends to be
competitive.
As global economic growth occurs, understanding marketing in all cultures is increasingly
important. International Marketing addresses global issues and describes concepts
relevant to all international marketers, regardless of the extent of their international involvement.
Not all firms engaged in overseas marketing have a global perspective, nor do
they need to. Some companies' foreign marketing is limited to one country; others market
in a number of countries, treating each as a separate market; and still others, the global enterprises,
look for market segments with common needs and wants across political and economic
boundaries. All, however, are affected by competitive activity in the global
marketplace. It is with this future that the 13th edition of International Marketing is
concerned.
Emphasis is on the strategic implications of competition in different country markets.
An environmental/cultural approach to international marketing permits a truly global
orientation. The reader's horizons are not limited to any specific nation or to the particular
ways of doing business in a single nation. Instead, the book provides an approach and
framework for identifying and analyzing the important cultural and environmental uniqueness
of any nation or global region. Thus, when surveying the tasks of marketing in a
foreign milieu, the reader will not overlook the impact of crucial cultural issues.
The text is designed to stimulate curiosity about management practices of companies,
large and small, seeking market opportunities outside the home country and to raise the reader's consciousness about the importance of viewing international marketing management
strategies from a global perspective.
Although this revised edition is infused throughout with a global orientation, export
marketing and the operations of smaller companies are not overlooked. Issues specific to
exporting are discussed where strategies applicable to exporting arise, and examples of
marketing practices of smaller companies are examined.
New and Expanded Topics in This Edition The new and expanded topics in this 13th
edition reflect issues in competition, changing marketing structures, ethics and
social responsibility, negotiations, and the development of the manager for the 21st century.
Competition is raising the global standards for quality, increasing the demand
for advanced technology and innovation, and increasing the value of customer satisfaction.
The global market is swiftly changing from a seller's market to a buyer's market.
This is a period of profound social, economic, and political change. To remain competitive
globally, companies must be aware of all aspects of the emerging global economic
order.
Additionally, the evolution of global communications and its known and unknown
impact on how international business is conducted cannot be minimized. In the third
millennium people in the "global village" will grow closer than ever, and will hear and
see each other as a matter of course. An executive in Germany will be able to routinely
pick up his or her videophone to hear and see his or her counterpart in an Australian
company or anywhere else in the world. In many respects, geographic distance is becoming
irrelevant.
Telecommunications, videophones, facsimile machines, the Internet, and satellites
are helping companies optimize their planning, production, and procurement processes.
Information -- and, in its wake, the flow of goods -- is moving around the globe at lightning
speed. Increasingly powerful networks spanning the globe enable the delivery of services
that reach far beyond national and continental boundaries, fueling and fostering international
trade. The connections of global communications bring people all around the world
together in new and better forms of dialogue and understanding.
This dynamic nature of the international marketplace is reflected in the number of substantially
improved and expanded topics in this 13th edition, including the following:
A deeper look at the causes of cultural differences
The Internet and cell phones and their expanding role in international marketing
Negotiations with customers, partners, and regulators
Big emerging markets (BEMs)
Evolving global middle-income households
Bottom of the pyramid markets
World Trade Organization
Free trade agreements
Asia-Pacific Economic Cooperation
Multicultural research
Qualitative and quantitative research
Country-of-origin effect and global brands
Industrial trade shows
A growing emphasis on both consumer and industrial services
Trends in channel structures in Europe, Japan, and developing countries
Ethics and socially responsible decisions
Green marketing
Changing profiles of global managers
Structure of the Text The text is divided into six parts. The first two chapters, Part 1, introduce the reader
to the environmental/cultural approach to international marketing and to three international
marketing management concepts: domestic market expansion, multidomestic marketing,
and global marketing. As companies restructure for the global competitive rigors of the
21st century, so too must tomorrow's managers. The successful manager must be globally
aware and have a frame of reference that goes beyond a country, or even a region, and encompasses
the world. What global awareness means and how it is acquired is discussed
early in the text; it is at the foundation of global marketing.
Chapter 2 focuses on the dynamic environment of international trade and the competitive
challenges and opportunities confronting today's international marketer. The importance
of the creation of the World Trade Organization, the successor to GATT, is fully
explored. The growing importance of cell phones and the Internet in conducting international
business is considered, creating a foundation on which specific applications in subsequent
chapters are presented.
The five chapters in Part 2 deal with the cultural environment of global marketing. A
global orientation requires the recognition of cultural differences and the critical decision
of whether it is necessary to accommodate them.
Geography and history (Chapter 3) are included as important dimensions in understanding
cultural and market differences among countries. Not to be overlooked is concern
for the deterioration of the global ecological environment and the multinational company's
critical responsibility to protect it.
Chapter 4 presents a broad review of culture and its impact on human behavior as it relates
to international marketing. Specific attention is paid to Geert Hofstede's study of cultural
values and behavior. The elements of culture reviewed in Chapter 4 set the stage for
the in-depth analyses in Chapters 5, 6, and 7 of business customs and the political and legal
environments. Ethics and social responsibility are presented in the context of the
dilemma that often confronts the international manager, that is, balancing corporate profits
against the social and ethical consequences of his or her decisions.
The three chapters in Part 3 are concerned with assessing global market opportunities.
As markets expand, segments grow within markets; as market segments across country
markets evolve, marketers are forced to understand market behavior within and across different
cultural contexts. Multicultural research, qualitative and quantitative research, and
the Internet as a tool in the research task are explored in Chapter 8.
Chapters 9 and 10 in Part 3 explore the impact of the three important trends in global
marketing: the growth and expansion of the world's big emerging markets; the rapid growth
of middle-income market segments; and the steady creation of regional market groups that
include NAFTA, the European Union, CAFTA, APEC, and the evolving Free Trade Area of
the Americas (FTAA). Also discussed is the growing number of trade agreements that have
been executed by the European Union and Japan with the FTAA and some Latin American
countries.
The strategic implications of the dissolution of the Soviet Union, the emergence of new
independent republics, the shift from socialist-based to market-based economies in Eastern
Europe, and the return of South Africa and Vietnam to international commerce are examined.
Attention is also given to the efforts of the governments of India and many Latin American
countries to reduce or eliminate barriers to trade, open their countries to foreign investment,
and privatize state-owned enterprises.
These political, social, and economic changes that are sweeping the world are creating
new markets and opportunities, making some markets more accessible while creating the
potential for greater protectionism in others.
In Part 4, Developing Global Marketing Strategies, planning and organizing for global
marketing is the subject of Chapter 11. The discussion of collaborative relationships, including
strategic alliances, recognizes the importance of relational collaborations among
firms, suppliers, and customers in the success of the global marketer. Many multinational
companies realize that to fully capitalize on opportunities offered by global markets, they
must have strengths that often exceed their capabilities. Collaborative relationships can provide technology, innovations, productivity, capital, and market access that strengthen a
company's competitive position.
Chapters 12 and 13 focus on product and services management, reflecting the differences
in strategies between consumer and industrial offerings and the growing importance
in world markets for both consumer and business services. Additionally, the
discussion on the development of global offerings stresses the importance of approaching
the adaptation issue from the viewpoint of building a standardized product/service
platform that can be adapted to reflect cultural differences. The competitive importance
in today's global market for quality, innovation, and technology as the keys to marketing
success is explored.
Chapter 14 takes the reader through the distribution process, from home country to the
consumer in the target country market. The structural impediments to market entry imposed
by a country's distribution system are examined in the framework of a detailed presentation
of the Japanese distribution system. Additionally, the rapid changes in channel
structure that are occurring in Japan, as well as in other countries, and the emergence of the
World Wide Web as a distribution channel are presented.
In Chapter 15, the special issues involved in moving a product from one country market
to another, and the accompanying mechanics of exporting, are addressed. The importance
of the Internet in assisting the exporter to wade through the details of exporting is discussed
in the context of the revised export regulations.
Chapter 16 covers advertising and addresses the promotional element of the international
marketing mix. Included in the discussion of global market segmentation are recognition
of the rapid growth of market segments across country markets and the importance
of market segmentation as a strategic competitive tool in creating an effective promotional
message. Chapter 17 discusses personal selling and sales management and the critical nature
of training, evaluating, and controlling sales representatives.
Price escalation and ways it can be lessened, countertrade practices, and price strategies
to employ when the dollar is strong or weak relative to foreign currencies are concepts presented
in Chapter 18.
In Part 5, Chapter 19 is a thorough presentation of negotiating with customers, partners,
and regulators. The discussion stresses the varying negotiation styles found among cultures
and the importance of recognizing these differences at the negotiation table.
Pedagogical Features of the Text
The text portion of the book provides a thorough coverage of
its subject, with subject emphasis on the planning and strategic problems confronting companies
that market across cultural boundaries.
The use of the Internet as a tool of international marketing is stressed throughout the
text. On all occasions where data used in the text originated from an Internet source, the
Web address is given. Problems that require the student to access the Internet are included
with end-of-chapter questions. Internet-related problems are designed to familiarize the
student with the power of the Internet in his or her research, to illustrate data available on
the Internet, and to challenge the reader to solve problems using the Internet. Many of the
examples, illustrations, and exhibits found in the text can be explored in more detail by accessing
the Web addresses that are included.
Current, pithy, sometimes humorous, and always relevant examples are used to stimulate
interest and increase understanding of the ideas, concepts, and strategies presented in emphasizing
the importance of understanding cultural uniqueness and relevant business practices
and strategies.
Each chapter is introduced with a Global Perspective, a real-life example of company
experiences that illustrates salient issues discussed in the chapter. Companies featured in
the Global Perspectives range from exporters to global enterprises.
The boxed "Crossing Borders," an innovation of the first edition of International Marketing,
have always been popular with students. They reflect contemporary issues in international
marketing and can be used to illustrate real-life situations and as the basis for class
discussion. They are selected to be unique, humorous, and of general interest to the reader.
The book is presented in full color, allowing maps to depict geographical, cultural,
and political boundaries and features more easily. Color also allows us to better communicate
through that medium the intricacies of international symbols and meanings in
marketing communications. New photographs of current and relevant international marketing
events are found throughout the text -- all in color.
"The Country Notebook -- A Guide for Developing a Marketing Plan," found in Part 6,
Supplementary Material, is a detailed outline that provides both a format for a complete
cultural and economic analysis of a country and guidelines for developing a marketing
plan.
In addition to "The Country Notebook," Part 6 comprises a selection of short and long
cases. The short cases focus on a single problem, serving as the basis for discussion of a
specific concept or issue. The longer, more integrated cases are broader in scope and focus
on more than one marketing management problem; new cases focus on services marketing,
and marketing strategy. The cases can be analyzed by using the information provided. They
also lend themselves to more in-depth analysis, requiring the student to engage in additional
research and data collection.
Supplements
We have taken great care to offer new features and improvements
to every part of the teaching aid package. Following is a list of specific features:
Instructor's Manual and Test Bank. The Instructor's Manual, prepared by the
authors, contains lecture notes or teaching suggestions for each chapter. A section
called "Changes to This Edition" is included to help instructors adapt their teaching
notes to the 13th edition. A case correlation grid at the beginning of the case
note offers alternative uses for the cases.
The Test Bank, prepared by Davis Folsom, University of South Carolina -- Beaufort, is
bound with the Instructor's Manual for ease of use. The Test Bank contains more than 2,000
questions, including true/false, critical thinking, and essay formats. Computerized testing
software with an online testing feature is also available on the instructor's CD-ROM.
Videos. The video program has been revised for the 13th edition and contains
new footage of companies, topics videos, and unique training materials for international
negotiations. Teaching notes and questions relevant to each chapter in the text
are available in the IM and at the Web site.
PowerPoint slides. This edition has PowerPoint slides for both the instructor and
students, the latter of which are narrated. The PowerPoint presentation that accompanies
International Marketing, 13th edition, contains exhibits from the text and
other sources. The PowerPoint slides are prepared by Caroline Juszczak.
Instructor's CD-ROM. This presentation manager, available to adopters of the textbook,
contains the Instructor's Manual, Test Bank, and PowerPoint. Instructors have
the ability to customize their lectures with this powerful tool.
Web site:www.mhhe.com/cateora13e. Included on the site are instructor resources
such as downloadable files for the complete Instructor's Manual, PowerPoint slides,
video clips, and links to current events and additional resources for the classroom.
Instructors can also link to PageOut to create their own course Web site and access
the complete Test Bank. For students, our site provides links to Web sites, an interactive
version of the Country Notebook, online quizzing, and narrated chapter
PowerPoint Slides.
Acknowledgments
The success of a text depends on the contributions of
many people, especially those who take the time to share their thoughtful criticisms and
suggestions to improve the text.
We would especially like to thank the following reviewers who gave us valuable insights
into this revision:
Francisco Coronel
Hampton University
Steven Engel
University of Colorado -- Boulder
Randy Howell
Kirkwood Community College
Joe H. Kim
Rider University
Susan D. Peters
California State University -- Pomona
Kristen Regine
Johnson & Wales University
Ye Sheng
Florida Atlantic University
Tanuja Singh
Northern Illinois University
Bronis Verhage
Georgia State University
We appreciate the help of all the many students and professors who have shared their opinions
of past editions, and we welcome their comments and suggestions on this and future
editions of International Marketing.
A very special thanks to Andy Winston, Amy Luck, Dan Silverburg, Rhonda Seelinger,
Harvey Yep, Sesha Bolisetty, Cara David, Sue Lombardi, Kathy Shive, and Janna Martin
from McGraw-Hill/Irwin, whose enthusiasm, creativity, constructive criticisms, and commitment
to excellence have made this edition possible.
Philip R. Cateora
John L. Graham
To obtain an instructor login for this Online Learning Center, ask your local sales representative.
If you're an instructor thinking about adopting this textbook, request a free copy for review.
2007 McGraw-Hill Higher Education